Ripple technology and XRP could replace banking system

Fibo Quantum

  • An association of leading experts in the financial industry describes in a new report that XRP has all the features to replace traditional banking.
  • Ripple’s technology is mature and superior to traditional money transfers and other services.

Ripple offers businesses of all sizes the ability to quickly and cost-effectively process transactions across borders in real time using smart remittance technologies. Ripple already cooperates with well-known payment service providers such as MoneyGram or the largest European bank, Santander Bank. A new report states that Ripple’s technologies are ahead of the current technology status of banks worldwide and could serve as a model for a central bank supported digital currency (CBDC).

Ripple payment system could serve as a model for CBDC

An independent panel of financial industry leaders, “Group of Thirty“, is calling on central banks and regulators around the world to step up regulation and research into a CBDC as China’s digital yuan is the most advanced. A new report by the Group of Thirty sees great potential in Ripple for central banks to use a CBDC of their own as a model:

It is possible that such a stablecoin could be valuable for cross-border payments, serving a function similar to that offered in the private sector by Ripple, a real-time gross settlement system, currency exchange, and remittance network whose digital currency, XRP, leapfrogs slow and expensive correspondent banking.

Although the mention of Ripple is a positive sign, the report concludes that it would be naive to believe that a crypto-currency could eventually replace the current government- and central bank-driven monetary system:

The libertarian view that a superior private sector currency (such as a cryptocurrency) could somehow supplant a government currency is utterly naïve. The long history of currency shows that while the private sector may innovate, in due time the government regulates and appropriates. Currency competition between the private sector and the public sector is never a level playing field.

The panel goes on to say that regulators are too timid in enacting new legislation and the public sector must ensure that the basic infrastructure is in place to launch new payment processing innovations. Currently, Facebook is stalking ahead with Libra, and developments from the ECB to research a digital euro are so far inadequate, according to some experts.

Cryptocurrencies contribute to adaptation

According to the report, all efforts will initially be associated with efficiency problems and high coordination costs at the outset, but the private sector and current developments in the cryptomarket can help to find a unified international regulatory framework that supports innovation and is not stifled by a lack of or over-regulation (freely translated):

Given the challenges the euro has faced, and the difficulty of having transnational money without a transnational fiscal and regulatory authority, it is difficult at this point to see how a global currency could evolve digitally when it has not yet happened with the existing system. Nevertheless, the externalities posed by digital currencies may prove so significant that previously unthinkable levels of international coordination become possible.


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